Terayon, I2, Mercury and more report

BarbaraC. Costanza

Positive surprises

Terayon Communication Systems
TERN, -1.28%
shares could get a lift Wednesday morning due to the company's positive third-quarter earnings report. The broadband access systems manufacturer posted earnings of $8.48 million, or 12 cents a share, compared with a loss of $1.69 million, or 4 cents a share, in the year-ago period. Analysts polled by First Call expected a profit of 9 cents a share. Revenue for the quarter reached $125.3 million, compared with $23.4 million in the year-ago period. Shares closed up $1.88 to $41.

After the market closed, I2 Technologies
ITWO
reported third-quarter net income of $28.8 million, or 12 cents a share, on sales of $319.5 million. Analysts polled by First Call anticipated a profit of 10 cents a share. Last year, the company earned $10 million, or 6 cents a share. License revenue in the latest quarter grew to $201.6 million, a 128 percent increase over the year-ago total. The company also announced a 2-for-1 stock split. The stock fell 4 to $180. 06.

Mercury Interactive Corp.
MERQ
said third-quarter earnings totaled $16.7 million, or 18 cents a share, compared with $8.2 million, or 9 cents a share, in the year-ago period. Analysts polled by First Call anticipated a profit of 16 cents a share. Revenue for the software company rose to $79.5 million compared with $47.5 million a year ago. Shares closed down $7.69 to $134.88.

Linear Technologies
LLTC
reported first-quarter earnings that beat analysts' average per-share profit target late Tuesday, citing overall strength in its business and a 57 percent rise in year-over-year sales. Shares of the linear integrated circuit manufacturer closed at $56.94, down $6, or 9.5 percent ahead of the news. After the market closed, Linear posted a first-quarter profit of $102 million, or 31 cents per share, compared to $58.5 million, or 18 cents in the year-ago period. Analysts had expected the company to earn 29 cents for the quarter, on average, according to a First Call survey.

Entrust Technologies
ENTU
reported third-quarter revenue of $42.2 million, an 86 percent increase over the year-ago period. Income from operations totaled $1.2 million, or 2 cents a share, beating the break-even estimate recorded by First Call. Shares closed down $1.06 to $21.50.

Direct Focus
DFXI
said net income for its third-quarter totaled $11.1 million, or 69 cents a share, beating the consensus estimate on Wall Street of a profit of 53 cents a share. In the year-ago period, the company earned $5.5 million, or 34 cents a share. Sales reached $52.7 million, an increase of 66 percent compared with the $31.8 million recorded last year. E-commerce sales rose 74 percent over the previous quarter to $11.5 million. The company added that it continues to see sustained sales growth across its Bowflex and Nautilus product lines. Shares closed down 13 cents to $36.

Advent Software
ADVS
reported third-quarter earnings of $7.1 million, or 21 cents a share, compared with $5 million, or 16 cents a share, in the year-ago period. Analysts expected a profit of 20 cents a share, according to First Call. The stock rose 50 cents to $69.75.

Copper Mountain
CMTN
announced favorable earnings for the third quarter accompanied with menacing news for the fourth quarter and financial year 2001. The company lowered earnings estimates to 4 to 6 cents for the fourth quarter. Analysts surveyed by First Call had been expecting earnings of 28 cents. The DSL provider did have good news for the third quarter, posting earnings of 27 cents, a penny better than the consensus estimate, on revenues of $93 million. Last year, the company earned 9 cents on revenue of $32 million during the comparable period. Shares rose $3.75 to $26.88.

Foundry Networks
FDRY
posted third-quarter sales of $113.2 million, with earnings of $28.5 million, or 22 cents a share. Analysts polled by First Call anticipated a profit of 20 cents a share. Last year, the company earned $23.5 million, or 19 cents a share in the second quarter. The stock rose 75 cents to $71.

Xilinx Inc.
XLNX, -0.68%
posted second-quarter earnings of $114 million, or 32 cents a share, on revenue of $437.4 million, compared with $56 million, or 16 cents a share, on sales of $238 million, in the year-ago period. Analysts expected a profit of 30 cents a share. The stock closed down $6.94 to $64.50.

PeopleSoft
PSFT, -40.00%
reported third-quarter earnings of $23.4 million, or 8 cents a share, on revenue of $443.1 million. That compares with breakeven results in the year-ago period, on sales of $346.1 million. Software license fee revenue increased to $131.5 million, a 100 percent increase over the year-ago period. Analysts polled by First Call expected the company to earn 7 cents a share. The stock closed down $3.06 to $32.75.

Xircom
XIRC
reported fourth-quarter net income of $12.2 million, or 39 cents per share, compared with $11 million, or 42 cents per share, during the same quarter last year. Analysts surveyed by First Call expected earnings of 42 cents per share, on average. Revenue was $134.1 million compared with $115.6 million during the same quarter last year. Xircom is a mobile voice and data communications company. The stock closed down 31 cents a share to $20.63.

Enron
ENE, +0.00%
posted a profit better than analysts' expectations amid a 154 percent jump in third-quarter revenue. Enron, which analysts expected to earn 32 cents in the third quarter, posted a profit of $292 million, or 34 cents a share. A year ago, Enron earned $223 million, or 27 cents a share. Sales grew smartly to $30 billion in the quarter on the strength of Enron's leading market positions in each of its businesses. The stock closed down 81 cents to $79.19.

Valero Energy Corp.
VLO, +0.23%
reported third-quarter earnings Tuesday that shot past the company's year-ago performance as well as analysts' consensus estimate. Net income totaled $127.4 million, or $2.01 a share, compared with net income of $22.6 million, or 40 cents a share, earned in the year-ago period. The increase was attributed to the Benicia, Calif., refinery and retail assets, which were acquired from ExxonMobil in the second quarter. Valero also benefited from significantly higher margins on the company's refined products and from more favorable discounts for its sour crude oil feed stocks. The stock rose 56 cents to close at $33.50.

Teradyne
TER, +0.62%
posted third-quarter earnings of $153.5 million, or 84 cents a share, on sales of $848 million. The consensus estimate on Wall Street, as measured by First Call, was for a profit of 83 cents a share. Orders for the quarter totaled $818.7 million. Last year, the company posted third-quarter sales of $497 million, with net income totaling $62.6 million, or 35 cents a share. Shares fell $9.44 to $25.

Forest Laboratories
FRX, -1.60%
posted net sales of $280 million, up 40 percent compared with the year-ago period. Net income totaled $51.7 million, or 57 cents a share, ahead of the $28 million, or 32 cents a share, earned in the year-ago period. Analysts polled by First Call had expected a profit of 50 cents a share. Forest Labs shares shed $1.88 to $117.13.

Oilfield services company Schlumberger Ltd.
SLB, -0.26%
posted earnings of $205 million, or 35 cents a share, up from $111 million, or 20 cents a share, earned in the year-ago period. Analysts polled by First Call had expected a profit of 34 cents a share. Revenue totaled $2.54 billion, up 18 percent compared with the year-ago period. The company advised investors that the oil and gas markets will remain tight until significant new production is developed. Shares rose $2 to $81.88.

Freddie Mac
FRE, +0.00%
said strong total portfolio growth and excellent credit results produced solid earnings for the third quarter. Net income totaled $645 million, or 86 cents a share, ahead of last year's $564 million, or 75 cents a share. Revenue totaled $1.13 billion, up 13 percent compared with the $1.11 billion that Freddie Mac generated in the year-ago period. The stock fell $1.06 to $51.56.

Newspaper publisher Knight Ridder
KRI, -0.23%
rose $1.31 to $45.56. The company reported a third-quarter profit slightly lower than the amount it earned a year ago, but this topped most estimates nonetheless. Net income slipped to $76.1 million, or 87 cents a share, from $76.2 million, or 78 cents; there were fewer shares outstanding in the latest quarter. Analysts surveyed by First Call were looking for a profit of 84 cents in the current-year period. Revenue rose to $812.9 million from $784.7 million, reflecting "the sustained health of national advertising in virtually all markets" as well as "very strong" help-wanted numbers in West Coast markets and the effect of cost controls, said Tony Ridder, chairman and chief executive of Knight Ridder, in a statement.

Caterpillar
CAT, -0.07%
reported third-quarter earnings per share of 62 cents, topping the 61 cents reported in the year-earlier period and surpassing the average analyst estimate compiled by First Call by 4 cents. Profit was reported to be $216 million, which was 1 percent lower than last year. Revenue for the period was up 1 percent to $4.78 billion. "The third quarter was a challenging one, especially considering the continued strength of the dollar and softness in key markets," said Glen Barton, Caterpillar's chairman and chief executive. Looking forward, the Dow Industrials component said full-year 2000 profit is expected to increase "moderately," and 2001 revenue is forecast to increase "slightly." Shares fell $1.25 to $30.50.

Dow component Johnson & Johnson
JNJ, -0.55%
checked in with third-quarter earnings of 89 cents a share, beating the First Call estimate by a penny and up 14 percent from the year-ago quarter. Sales for the latest quarter came in at $7.2 billion and net earnings at $1.3 billion, up by 4.6 and 13.8 percent, respectively, from 1999's third quarter. The drug giant said the impact of the stronger dollar trimmed third-quarter sales by 3.6 percent. Worldwide pharmaceutical sales of $2.9 billion for the quarter increased by 7.3 percent over the same period in 1999, J&J said. The stock rose 13ents to $97.06.

Merrill Lynch
MER, -1.13%
bested the consensus estimate for its September quarter, posting earnings of 94 cents a share vs. the consensus of 86 cents compiled by First Call. Merrill said net revenues rose 15 percent to $6.1 billion, driven by record asset management and portfolio service fees. Revenue from trading -- a closely watched number for the group this quarter -- rose 3 percent to $1.2 billion with equity derivatives gains offsetting a "small decline" in bond trading. Investment banking revenue slid 10 percent to $858 million. Merrill also booked $318 million in revenue on sales of private equity. The stock fell 56 cents to close at $57.81.

Delta Air Lines
DAL, +1.00%
posted third-quarter earnings of $2.08 per share, up 9 percent from a year ago, excluding unusual items. The latest figure came in 2 cents ahead of the First Call consensus of $2.06 per share. Operating revenue increased 13.5 percent amid higher passenger demand, yield improvement and the acquisition of Comair. The stock fell $2.06 to close at $40.88.

Citigroup
C, +1.23%
reported third-quarter earnings of 67 cents a share, compared with 53 cents earned in the year-earlier period. Analysts were expecting earnings of 65 cents a share on average, according to First Call. Revenue for the period increased 15 percent to $16.8 billion. "We continue to invest our substantial capital to expand our leadership in key areas, enhance our long-term growth and build our base of stable, recurring earnings," said Sandy Weill, chairman and CEO. Citigroup's stock, which is a component of the Dow Industrials, fell $1.44 to $49.38.

McAfee.com
MCAF
reported a third-quarter loss of $3.8 million, or 9 cents a share, while analysts expected a loss of 11 cents a share. Revenue for the quarter totaled $12.6 million, up $5.8 million compared with the year-ago total. Shares fell $3.75 to stand at $7.

JNI Corp.
JNIC
posted third-quarter net income of $5 million, or 18 cents a share, beating the consensus estimate by a nickel. Revenue grew 177 percent compared with the year-ago period, to $30 million. The company's gross margins widened to 59.3 percent from 58.8 percent in this year's second quarter, due to production efficiencies. The stock fell $9.94 to $76.56.

Idec Pharmaceuticals
IDPH
reported third-quarter revenue of $41.2 million, up from net income of $16.1 million, or 30 cents a share, generated in the year-earlier period. Analysts had expected a profit of 29 cents a share. In the year-ago quarter, the company posted earnings of $10.7 million, or 21 cents a share. Revenue for the latest quarter included $36.8 million from Idec's joint business with Genentech for the commercialization of Rituxan, higher than the $25.9 million realized in the year-ago period. Shares rose $14.44 to $182.06.

LifeMinders
LFMN
reported a third-quarter pro forma net loss of $4 million, or 17 cents per share, narrower than the loss of $10.9 million, or 46 cents per share, seen during the same quarter last year. The stock fell $1.88 to $9.56.

Cobalt Networks
COBT
reported a third-quarter net loss of $354,000, or 1 cent per share, narrower than the loss of $4.2 million, or 20 cents per share, seen during the same quarter last year. Analysts surveyed by First Call expected a loss of 6 cents per share. Revenue was $20.4 million compared with $16.2 million during the year-ago period. Analysts surveyed by First Call had expected a loss of 24 cents per share. Including one-time items, third-quarter loss was $7.8 million, or 32 cents per share. Revenue grew to $16.7 million compared with $4.6 million generated during the year-ago quarter. The stock fell $1.13 to $55.06.

Earnings advisories

After the market closed, Metro One Telecommunications
MTON
said it sees third-quarter earnings coming in between 20 and 22 cents a share vs. the consensus estimate of 13 cents a share. The company cited call volume growth across most of its customer base, increased efficiencies and managed labor costs. Shares closed up 14 cents to $12.83 ahead of the news.

The insurance company RenaissanceRe Holdings
RNR, +0.79%
said it expects to report third-quarter profit from operations of $1.70 to $1.75 per share, compared with the average analyst estimate compiled by First Call of $1.58. The company attributed the better-than-anticipated results to increases in the growth of managed catastrophe premiums. The stock rose $4.63 to $64.63.

Security Capital Group
SCZ, +0.02%
said it anticipates a third-quarter profit between 72 and 75 cents a share, which would beat the current consensus estimate of 61 cents a share. The company cited strong performance in its Security Capital's operating affiliates in the United States and Europe. Shares rose 13 cents to $19.13.

Honeywell
HON, +1.17%
said it had third-quarter profit from operations of 76 cents per share, an increase of 10 percent over the year-earlier period. This was in line with the average analyst estimate as compiled by First Call. Quarterly sales rose 3 percent over last year to a less-than-expected $6.22 billion. "Like other companies, we are confronting the effects of surging raw material prices, a weakened euro and pockets of slow economic activity," said Michael Bonsignore, Honeywell's chairman and CEO. Looking ahead, the company said it expects to report earnings of 86 to 88 cents in the fourth quarter, yielding a full-year profit of $3.00 to $3.02 per share. Analysts have been expecting profits of 88 cents and $3.03, respectively. Honeywell's stock, a component of the Dow Industrials, fell 56 cents to $35.25.

Electronics For Imaging
EFII, +2.35%
reported in-line earnings for the third quarter but warned of a possible fourth-quarter shortfall. The company recorded third-quarter net income of $20 million, or 37 cents per share, compared with $29 million, or 51 cents per share, earned in the same quarter last year. Analysts surveyed by First Call had expected earnings of 37 cents per share, on average. Revenue was $153 million compared with $158 million during the same quarter last year. Also, Electronics For Imaging said revenue and net income during the fourth quarter will be hurt by weak demand in the printing and imaging market. Electronics For Imaging now expects net income of 6 cents to 12 cents per share on revenue of between $115 million and $125 million. Analysts surveyed by First Call had been expecting earnings of 43 cents per share, on average, for the current three months. Shares lost $5.19 to $11.94.

IKON Office Solutions
IKN
warned investors that it now anticipates fourth-quarter earnings between 10 and 13 cents a share, short of the profit of 19 cents a share that analysts have been expecting. The company's estimate includes a one-time gain of 1 cent. The news sent shares down more than 10 percent. In addition, revenue growth will be about 2.5 percent, compared with the previous expectation of growth in the range of 4 to 5 percent. The company cited increased pricing pressure in its office-equipment business, a drop in service revenue and a decrease in revenue from the company's technology service operations. The stock fell 81 cents to $2.38.

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